South Korea’s KOSPI maintained gains of around 2% on the morning of the 18th, reclaiming the 6,800 level. With all three major New York Stock Exchange indices rebounding overnight, foreign investors turned to net buying during the session, leading the index higher.

As of 11:11 a.m., the KOSPI stood at 6,848.29, up 132.88 points (1.98%) from the previous session. The index opened at 6,885.70, up 170.29 points (2.54%), before paring some of its gains.

By investor category, foreign and institutional investors net bought 231.2 billion won (approximately $167.2 million) and 341.5 billion won (approximately $246.9 million), respectively, lifting the index. Retail investors, meanwhile, were net sellers of 1.1444 trillion won (approximately $827.4 million). Notably, foreign investors had been net sellers early in the session but flipped to a buying bias intraday — their first net buying turn in eight sessions since the 8th.

Overnight in the U.S. market, all three major New York indices rebounded as Treasury yields and international oil prices declined. The S&P 500 rose 1.14%, the Nasdaq gained 1.69%, and the Dow Jones Industrial Average added 0.61%. Semiconductor stocks such as Nvidia and Micron showed particular strength, driving buying flows into South Korea’s large-cap chip names.

Among large-cap stocks by market capitalization, semiconductor plays stood out, with Samsung Electronics up 2.57% and SK Hynix up 4.47%. SK Square (3.47%), Samsung Electro-Mechanics (5.19%), and Hyundai Motor (1.24%) also advanced. On the downside, LG Energy Solution (-0.41%), KB Financial Group (-1.95%), and Shinhan Financial Group (-2.12%) declined.

By sector, electrical and electronics (3.31%), information technology (3.17%), and construction (2.08%) led gains, while healthcare (-1.62%) and distribution (-0.41%) fell.

The KOSDAQ index was at 827.42, up 5.24 points (0.64%) from the previous session at the same time. The KOSDAQ opened at 832.72, up 10.54 points (1.28%), and rose as high as 833.57 before giving back some gains.

Among KOSDAQ large-caps, Alteogen (0.39%), EcoPro BM (1.46%), Rainbow Robotics (0.70%), Leeno Industrial (3.61%), and HPSP (0.75%) advanced. EcoPro (-0.79%), EO Technics (-1.51%), and Simmtech (-2.34%) declined.

The won-dollar exchange rate stood at 1,381.10 won, down 0.40 won from the previous session’s close, holding in the 1,380-won range.

Han Ji-young, an analyst at Kiwoom Securities, said, “The shift in foreign investor behavior is a key watch point, given they net sold 2.2 trillion won (approximately $1.6 billion) in the KOSPI the previous day, creating supply pressure on the market.” Han added, “Macro uncertainty appears to be peaking around the September FOMC meeting, and market sensitivity to the high-rate environment is diminishing.”

Defense AX Seminar Discusses AI Warfare

The same day, Naver Cloud hosted “Defense AI Day” at the Shilla Hotel in Seoul. At the event, former Vice Defense Minister Kim Sun-ho emphasized the necessity of Defense AX (AI transformation), stating that artificial intelligence is fundamentally changing how wars are conducted.

A former Army lieutenant general, Kim served as head of the Joint Chiefs of Staff’s Force Planning Directorate and Capital Defense Commander before becoming Vice Defense Minister and Acting Defense Minister. He joined Naver as a full-time executive advisor in August.

Citing the war in Ukraine, Kim said, “According to CSIS estimates, combined casualties from both countries total approximately 2 million, with 70% — roughly 1.4 million — being Russian casualties, of which about 400,000 are fatalities.” He added, “This is the first time in history that a country with overwhelming military superiority has suffered such massive losses.”

Kim identified AI as the core driver of the escalating casualties. He explained that early in the war, low-cost drones were merely finding targets, but four years later, drones are now linked with AI to form a new combat system in which they communicate with one another.

Kim highlighted that a defining feature of Defense AX is the shift in leadership from the military to the private sector. In the past, the military designed the framework and civilian technology supported it; now, the military directly adopts systems built by the private sector.

However, Kim drew a clear line that final judgment must rest with humans. “The one area that cannot and must not be conceded is the final decision and command authority,” he stressed. “That must remain firmly in the human domain.”

At the event, Naver Cloud introduced its defense AI full stack, comprising Forward Deployed Engineers (FDE), applications, data fabric, AI models, and infrastructure. Kim Yu-won, CEO of Naver Cloud, stated, “Excluding the United States and China, South Korea is the only country capable of building an AI full stack.”

South Korea’s Ministry of National Defense is currently establishing Defense AX hubs at five locations this year: Yongsan in Seoul, Pangyo, Daejeon, Yangjae, and Busan. Former Vice Minister Kim urged that AX hubs must not remain mere AI research spaces, but should enable AI to learn the characteristics of the South Korean military and its adversaries, operational areas, and actual operational methods, and be repeatedly tested and refined in military field settings.